How do the changes to the Overseas Investment Act affect me?
The implications of the Overseas Investment Amendment Act 2018 (“Act”) have been widely discussed and, in particular, its effect on ‘overseas persons’ acquiring residential property in New Zealand. As of 22 October 2018, new laws prevent certain overseas persons from acquiring residential property in New Zealand.
The Act will not apply to transactions entered into before 22 October 2018.
The new laws apply to land that is categorised as ‘residential’ or ‘lifestyle’ under the District Valuation Roll.
An ‘overseas person’ means a person who is neither a New Zealand citizen nor ‘ordinarily resident in New Zealand’. A person is ‘ordinarily resident in New Zealand’ if they:
- hold a residence class visa; and
- have lived in New Zealand for the last 12 months; and
- have been present in New Zealand for at least 183 days in the last 12 months; and
- are a New Zealand tax resident.
The restrictions do not apply to citizens or permanent residents of Australia or Singapore who live in New Zealand.
Overseas Investment Office Consent
The new laws are not a complete ban on overseas persons acquiring residential property in New Zealand, but (subject to certain exemptions) such acquisitions will now require the consent of the Overseas Investment Office (“OIO”).
There are some exemptions from the requirement to obtain OIO consent, such as if an overseas person acquires an apartment ‘off the plan’ within a multi-storey development of 20 or more apartments. Developers of these properties can apply to the OIO for an exemption to sell a certain percentage of such properties to overseas purchasers.
Another change under the new laws is that every person acquiring residential land will be required to complete a Residential Land Statement form which can be provided by a conveyancer (usually a lawyer). It is an offence to make a false or misleading statement and the penalties are significant.
Copy supplied by Bruce Costain, Partner - Brookfields Lawyers